Sunday Blog, 17 October 2021
LBE BOIL UPL RBD UJO AAOG BLOE IOG AEX SCIR PTAL TAL HUR HRCXF 88E EEENF ORCA EGY PPC COPL XOP EME DEC DECPF CASP JKX TRIN KIST ECHO FOG ZPHR
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Longboat Energy (LBE) announced a discovery at the Rødhette exploration well, in which it holds a 20% interest. Preliminary estimates by the operator place the size of the discovery between 9 and 12 million barrels of oil equivalent recoverable, which is at the lower end of pre-drill expectations. The Egyptian Vulture well (15% interest) is still being drilled and Mugnetind (20% interest) has now been spud, which is estimated to contain gross mean prospective resources of 24 million barrels of oil equivalent with further potential upside estimated at 47 million barrels of oil equivalent. Chance of success associated with the Mugnetind prospect is 51% with the key risks being reservoir presence/quality. Drilling at Ginny/Hermine (9% interest) is expected to commence in December, the rig has been confirmed for the Kveikje and Cambozola wells, and the Copernicus well site survey is to be acquired shortly, so plenty of further news coming up. More on LBE in the private blog.
Baron Oil (BOIL) announced completion of the increase in its interest in UK Offshore Licence P2478 from 15% to 32%. Work on the outstanding Phase A technical work commitments is ongoing with 3D seismic reprocessing expected to be delivered during the first half of 2022, hopefully providing sufficient time to mature the Dunrobin Prospect and engage with potential drilling partners. Dunrobin is evaluated by Baron to be one of the few remaining targets yet to be drilled in the UK North Sea with estimated gross mean prospective resources of the order of 100 million barrels (a non-SPE PRMS compliant estimate). Well costs are expected to be relatively modest at around £7 million as the prospect lies in shallow water of less than 100 metres and the total drilling depth of the well is anticipated to be approximately 660 metres. It could make for a good promote. Further on BOIL in the private blog.
Upland Resources (UPL) and Reabold Resources (RBD) (via its investee company Corallian Energy) were the two reducing their stakes in Dunrobin and the latter, along with Union Jack Oil (UJO) issued announcements headed “West Newton Well Test Operations Update.” Unfortunately, they contained no news regarding the well test and investors are starting to wake up to the reality that West Newton perhaps is non-commercial. Reabold in particular is one that I’ve warned about continuously in the Sunday blog over the last couple of years and its share price is down over 90% from 1.7p to 0.165p. Like Anglo African Oil &Gas (AAOG) and Block Energy (BLOE) (both also warned about continuously in the Sunday blog and down 100% and 90% respectively), RBD was another one with excellent potential on the short side.
IOG (IOG) announced a drilling update on the Southwark field, the third of its Phase 1 fields after Elgood and Blythe. An issue was identified on one of the legs of the rig and the installation process was halted. It is initially expected that the rig will be transported to port to undertake any necessary assessments before drilling can be safely resumed. In the meantime, as per the recent Blythe drilling update, IOG continues to expect First Gas from both the Blythe and Elgood fields this quarter once the final subsea and onshore installations are complete. Now 29p, IOG has been covered each week in the private blog from around 9p up.
Aminex (AEX) and Scirocco Energy (SCIR) announced payment of the Kiliwani North gas receivables. Aminex has reached agreement with the Tanzania Petroleum Development Corporation for payment of outstanding monies owed for past gas sales resulting in a net cash inflow to the company of approximately $1.85 million. Scirocco is receiving $150,000 too. The next big event for both is the drilling of the Chikumbi-1 well, onshore Tanzania, which is planned to spud in the third quarter of next year. Aminex is carried for its 25% interest; Scirocco is not and is looking for a deal. More on AEX in the private blog.
PetroTal (PTAL TAL) announced a third quarter operations and liquidity update. Production of their wells declines quickly, but the latest well, 8H, achieved payout in under 40 days on its $11.8 million capital cost and has continued to produce an average of over 7,000 barrels of oil per day so far this quarter. Well 7D is still averaging more than 1,300 barrels of oil per day and has generated cash flow approximately double its capital cost since coming online five months ago. Well 9H has reached its third week of drilling and production commencement is expected next month. I mentioned PTAL positively in the Sunday blog last November at 7.6p. It’s now 25p.
Hurricane Energy (HUR HRCXF) announced half-year results plus an operational and financial update. Profit after tax for the six months was $42,776,000 and net assets at 30 June were $110,628,000. The board remains negative as usual, but Crystal Amber Fund have increased their stake further to 26.68%. Lastly, 88 Energy (88E EEENF) announced a quarterly activities report. The Merlin-2 appraisal well is still planned for the first quarter of 2022, permitting and rig selection is currently underway and although the company recently completed a capital raise for the well, it may also consider a farm-out to a strategic partner. Now 1.552p, 88E has been covered in the private blog from the 0.40s.
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In other news, Orcadian Energy (ORCA) announced the farm-out of the Carra Prospect, Vaalco Energy (EGY) announced the award of two offshore blocks in Gabon, President Energy (PPC) announced an October update, Canadian Overseas Petroleum (COPL XOP) announced the publication of a research note, Empyrean Energy (EME) announced various small exercises of its warrants, Diversified Energy (DEC DECPF) announced a media response to a critical Bloomberg piece, Caspian Sunrise (CASP) announced a BNG operational update, JKX Oil & Gas (JKX) announced a quarterly operations update, Trinity Exploration (TRIN) announced a third quarter operational update, Kistos (KIST) announced the appointment of directors, Echo Energy (ECHO) announced a well intervention programme, Falcon Oil & Gas (FOG) announced preliminary results from the Velkerri 76 S2-1 well, and Zephyr Energy (ZPHR) announced a State 16-2LN-CC operations update.